Fitch Ratings has downgraded one and affirmed 12 classes of
The Rating Outlook on class F remains Negative.
RATING ACTIONS
Entity / Debt
Rating
Prior
MSBAM 2013-C13
A-3 61763BAT1
LT
AAAsf
Affirmed
AAAsf
A-4 61763BAU8
LT
AAAsf
Affirmed
AAAsf
A-S 61763BAW4
LT
AAAsf
Affirmed
AAAsf
A-SB 61763BAS3
LT
AAAsf
Affirmed
AAAsf
B 61763BAX2
LT
AAsf
Affirmed
AAsf
C 61763BAZ7
LT
Asf
Affirmed
Asf
D 61763BAC8
LT
BBB-sf
Affirmed
BBB-sf
E 61763BAE4
LT
BB+sf
Affirmed
BB+sf
F 61763BAG9
LT
BB-sf
Affirmed
BB-sf
Page
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VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Increased Loss Expectations; Greater Certainty of Loss: The downgrade on class G and Negative Outlook on class F reflect higher loss expectations since Fitch's prior rating action, driven by increased losses on
Regional Mall FLOC: The largest contributor to loss expectations,
Collateral occupancy declined to 79% as of
Fitch's base case loss of 11.7% reflects a 9% cap rate off the YE 2021 NOI. Fitch's analysis reflects concerns with the occupancy declines, rollover risks and nearby competition but gives credit for the strong tenancy, sales and sponsorship.
Pool/Maturity Concentration: The top 10 loans comprise 54.6% of the pool. Loan maturities are concentrated in 2023 (96.6%). Based on property type, the largest concentrations are retail at 60.9%, hotel at 14.6% and multifamily at 9.9%.
The largest loan in the pool, Stonestown Galleria (15.5%), is secured by 585,758-sf of an 853,546-sf regional mall in
The sponsor has been successful in redeveloping vacated space at the mall. Target recently expanded into 1/3 of the former
Comparable in-line sales for tenants occupying less than 10,000 sf and reporting sales were
Fitch's base case loss of approximately 2.5% is based off a 10% cap rate and a 15% total haircut to the YE 2019 NOI. The loan is not currently considered a FLOC. Fitch's s analysis gives credit for the positive leasing activity and upside potential for the existing vacant space and reflects the high-quality asset, location and sponsor commitment.
Increasing Credit Enhancement (CE): As of the
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrades of classes in the 'AAAsf' and 'AAsf' categories are not likely due to sufficient CE and expected continued amortization but could occur if interest shortfalls affect these classes. Classes in the 'Asf' and 'BBBsf' categories would be downgraded should overall pool losses increase significantly and/or one or more of the larger FLOCs have an outsized loss, which would erode CE. Classes E, F and G would be downgraded if loss expectations increase from further performance deterioration on the FLOCs or additional loans become FLOCs and/or transfer to special servicing.
Fitch has identified both a baseline and a worse-than-expected, adverse stagflation scenario based on fallout from the
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Upgrades of classes B, X-B, C, PST and D may occur with significant improvement in CE and/or defeasance, but would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is a likelihood for interest shortfalls. Upgrades of classes E, F and G are not likely but could occur if performance of the FLOCs improves significantly and there is sufficient CE.
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Additional information is available on www.fitchratings.com
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